AUTHOR(S)
JIMMY ALANI, PATIENCE ATUHAIRWE, DAVID L. OKODEL
ABSTRACT
The paper examines the relationships between government funding of education and
government investment in higher education in Uganda during the 2005 to 2020 period. The
major hypotheses of the study are that government funding of higher education (GHE)
depends on government investment in education (GIE) and the reverse is true. During the
given period, government spending on education as a percentage of GDP for Uganda was on
average 2%, while the world average was 4% (World Bank, 2022). This implies that low levels
of government funding are responsible for the low levels of government investment in higher
education in Uganda. Therefore, the study aims to estimate the government investment
function of higher education and the production function of government funding in Uganda
during the given period. The analyses of the relationships between government education
funding (GIE) and government investment in higher education (GHE) are conducted by
using the generalised least squares (GLS) method. The dataset for the study was obtained
from Uganda’s Ministry of Education and Sports (MoES), Education Sector Plan. The effects
of 1% government spending on primary education, secondary education, technical and
vocational education training (GTVE) and GHE on GIE were as follows: 0.354%, 0.086%,
0.044% and 0.063% per annum, respectively. This implies that in Uganda, GHE contributes
very little (0.063%) to GHF compared to the contribution of GPE to GIE (0.35%). Meanwhile,
a 1% increase in GIE might have caused growth in GHE and GTVE to rise by 11.45% and
17.18%, respectively. Hence, the paper suggests increasing GIE, GTVE and GHE adequately.
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